Acg Metals Regulatory News (ACG)

4 May 2007 14:55

Accuma Group PLC04 May 2007 Accuma Group plc ("Accuma" or "the Group") Trading Update The Group continues to experience difficult trading conditions in its IVAdivision and, as a consequence, profits for the current financial year to 31July 2007 will be materially below market expectations. In January we highlighted the trading difficulties within our IVA division whichresulted from deterioration in marketing performance together with continuedcreditor pressure resulting in IVA approval rates of circa 80% compared tohistoric conversions of 94%. We made changes to our marketing strategy earlier this year and although somemediums have performed better than expected, overall results have beendisappointing and the marketing director we appointed in November last year hasnow left the group. The new IVA case run rate for April was 186 giving anaverage of 199 per month for the third quarter. Given the continued challengesin marketing and with approval rates remaining low as a result of creditorpressure, we do not expect our run rate to recover in the way we hadanticipated. Looking forward our client acquisition strategy will be built around strategicreferral relationships which should enable us to contain client acquisitioncosts. We remain confident that following several months of dialogue withcreditor organizations, the industry will be able to agree a sustainable wayforward and that we will begin to see an improvement in creditor acceptances. Itis widely expected that for creditor pressure to be eased, a compromise on lowerfees will need to be reached. Given the quality of our average case and dividendyield, together with anticipated changes that will streamline the process, we donot believe this will have a negative impact. Byrom Keeley, our debt management division and Loan Line, our loan and mortgagebroking division are trading marginally ahead of expectations. Our current cash position is £3m. We expect to have an earnout commitment toLoan line in October 2007 in the region of £1.2-1.3 million which may besatisfied by cash, shares or a combination entirely at our discretion. Should wepay this earn out in cash we anticipate our remaining cash balance to be£1.6million. Accuma Group plcCharles Howson, Chief Executivecharles.howson@accumagroup.com Tel: 0845 202 6787 Daniel Stewart & Company plcLindsay Mairlindsay.mair@danielstewart.co.uk Tel: 020 7776 6550 Abchurch CommunicationsChris Lanechris.lane@abchurch-group.com Tel: 020 7398 7700 This information is provided by RNS The company news service from the London Stock Exchange